Estate Baron has developed a Whitelabel Property Development Crowdfunding package which allows Property Developers to raise Equity and Mezzanine funding from small investors across Australia. We provide a Disclosure Document in the form of a Prospectus which allows you to promote your offer openly and raise unlimited money from an unlimited number of investors. We also provide a whitelabel technology platform using state of the art technology that you can brand and customize to your own needs. And to get you started we also provide you access to the thousands of investors already signed up on our platform. If you are a Property Developer who is looking for alternate and cost effective sources of mezzanine and equity capital, this is exactly what you have been waiting for. Get in touch at info@estatebaron.com

1. Property Developers are facing a
funding gap

2. Bank LVRs and Presales requirements
are getting harder

3. Which means there is an increased
requirement for Equity and Mezzanine
funding

4. Mezzanine or 2nd mortgage funding is scarce and
when available can cost 14-20% per annum and 2%
establishment costs

5. Typically Project Developers issue an
Information Memorandum (IM) to raise
Equity and Mezzani funds for their
Projects

6. However under current regulations you
can only issue 1 offer every 12 months
and raise a maximum of 2 Million AUD

7. This IM cannot be promoted openly (for
instance mass mailers, online
promotions)

8. And you can only make 20 personal
offers in a private manner

9. If wholesale investors are involved then
the 2 Million and 20 investors rule does
not apply

10. But the restrictions on open promotions
and only one offer a year still apply

11. Beyond that you need an AFSL or
approach an intermediary who has an
AFSL and can write up an offer for you

12. Getting an AFSL is hard and time
consuming

13. And approaching an intermediary like a
Crowdfunding platform with a Retail
AFSL to issue a PDS increases costs
significantly

14. Since the PDS is issued by the AFSL
they become liable for the offer thus
increasing the risk to them

15. The AFSL insurance costs increase, and
a project failure can mean loss of the
AFSL due to the litigation and
complaints that may follow

16. This means that most AFS Licensees prefer not to issue PDS
for 3rd party Property Development projects or charge
exorbitant fees making the costs unacceptable to
Developers

17. In addition a PDS requires 3rd Party
Custodians/Trustees which also adds
to costs

18. Most Developers have Distribution lists
of potential buyers and every project
has a marketing budget

19. Which means a pool of interested
investors exists beyond wholesale
investors

20. However the current compliance
regime makes it hard to access them

21. There is however another cost effective
solution that can make it easier to raise
equity/mezz funding from Retail
investors

22. The Developer can issue a document
called as Prospectus in order to raise
funds for his Development project

23. A Prospectus has the same information
that goes in an IM and has the same
level of risk warnings that go in a PDS

24. Just like a PDS, a Prospectus can be
promoted openly

25. And under a Prospectus you can raise
an unlimited amount of money

26. From an unlimited amount of investors

27. Making it a perfect solution for fund
raising for Property Developers

28. You can raise funds for your projects on your own website
and your terms without the need of an AFSL if you go the
Prospectus route

29. If this is so easy, why has this not been
done before?

30. Typically a Prospectus is used by a
Company that is about to list on the
stock market

31. Listing for Businesses requires
significant level of higher disclosures
and documentation

32. Which means the typical legal fees for
issuing a prospectus can range from
25K AUD to 250K AUD

33. Issuing a Prospectus is hence
considered a costly affair

34. However a Property Developer is not
seeking to list his project on the stock
market

35. Estate Baron has created a Cookie cutter template that
Property Developers can use to issue a Prospectus for their
Development projects

36. The same data such as feasibility,
market studies that go in an IM needs to
be filled into a Prospectus

37. The actual cost of filing a Prospectus with ASIC
and start using it is only $2350

38. ASIC has 2 weeks to review after which
the Prospectus can be used

39. The second argument that is made
against a Prospectus is you need to a
Public company

40. But the cost of incorporation of a Public
Company is similar to that of a PTY
PTY

41. You do need 3 Directors which can be
you and your associates

42. But having a public unlisted company as your SPV means
you can have an unlimited number of shareholder investors

43. The next argument made is the need for
audits and continous disclosure

44. However the Project SPV is a brand new entity
without any history

45. Main
SPV
Fundraising
SPV LTD
1st Mortgagee
Prospectus
Senior
Debt Equity or
Mezz
It also is going to have only a few transactions in
which it gives money to the main SPV

46. This means there is not much to audit or report in
terms of continous disclosures

47. Audit costs can be as low as 2 to 5K AUD
and any financial reporting to investors can be done
online on the project website

48. A public company is also required to do AGMs for
shareholders but even for listed companies shareholder
meetings are sparsely attended and manageable

49. Shares for the public SPV can be issued as non voting
giving complete control of the process to the Developer

50. Dealing with many investors can be
problematic, keeping records of funds,
KYC, AML, CTF obligations

51. We solve that using Technology

52. Seamless solution with beautiful user experience allows to
manage investors, projects, and do all AML CTF KYC checks

53. Integrated signature tool to accept
applications, CSV data exports on
demand. No piles of papers.

54. We offer a combined Compliance and Technology
package as a Crowdfunding toolkit

55. We will guide you through issuing the Prospectus
and assist with any ongoing compliance related
matters

56. And provide a crowdfunding platform branded to your
requirements in a Software as a Service model

57. So that you can start raising funds for your Development project
without worrying about compliance and its associated costs or
worrying ahbout how to handle technology

58. CROWDFUNDING TOOLKIT
TAILOR MADE PROSPECTUS
WHITELABEL CROWDFUNDING as a
SERVICE

59. info@estatebaron.com
1 300 033 221

60. Lets compare the costs and benefits
with funding from institutional
mezzanine funds vs Crowdfunding

61. For a 2 Million Dollar raise the median
cost of establishment assuming 1.5%
comes to 30,000 AUD plus other fees

62. Assuming the funds were invested for 2 years
at 15%, total interest is 600,00 AUD even with
out capitalization

63. Total cost of capital = 630,000 AUD or above

64. Under a Public Company SPV with prospectus
model the fees are

65. ASIC prospectus fees $2350
ASIC Public Company incorporation $700
Audits for 2 years $10,000

66. Retail investors are happy with 8 to 12%
annual returns given the lack of other
competitive options

67. Assuming 10% return for 2 years on 2 Million
AUD. Total return is 400,000 AUD

68. Total cost of Capital under Public
Company and Prospectus model:
$413,000

69. Total savings : 187,000 AUD

70. We charge a one time customization fee of $10,000
to customize the technology to your branding and
providing a template Prospectus

71. And a monthly fee of $1000 to support
and maintain the platform eliminating
all Tech administration related hassles

72. Even after this you end up saving $150,000 or more.
As project size increases the savings only increase!

73. The same technology and prospectus template can
be used for a number of future projects making the
one time cost negligible